EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0907880
Customs Act 1901
Background
Part XVA of the Customs Act 1901 (the Act) sets out a scheme under which Tariff Concession Orders (TCOs) may be made by the Chief Executive Officer of Customs (the CEO). A lower rate of customs duty applies to goods that are the subject of a TCO.
Under section 269F of the Act, a person may apply to the CEO for a TCO in respect of goods. If the CEO is satisfied that the application is not in respect of goods specified in section 269SJ of the Act, which sets out those goods that cannot be subject to a TCO, the CEO must decide whether the application meets the core criteria.
Section 269C of the Act provides that a TCO application meets the core criteria if, on the day on which the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. Section 269B of the Act provides that ‘goods produced in Australia’ has the meaning given by section 269D, ‘ordinary course of business’ has the meaning given by section 269E and ‘substitutable goods’ in respect of goods the subject of a TCO application, means goods produced in Australia that are put, or are capable of being put, to a use that corresponds with a use (including a design use) to which the goods the subject of the application can be put.
Subsection 269P(3) of the Act provides that if the CEO is satisfied that a TCO application meets the core criteria, the CEO must make a written order (a TCO) declaring that the goods the subject of the TCO application are goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 (the Tariff) specified in the order applies.
Super Cheap Auto applied for a TCO in respect of certain jump starters on 06 March 2009.
Instrument
TCO No 0907880 was made on 29 May 2009. It declares that those certain jump starters are goods to which item 50 of Schedule 4 to the Tariff applies since the CEO was satisfied that no substitutable goods were produced in Australia. The general rate of duty on these goods is 5%. The rate of duty for the goods subject to the TCO is free.
Consultation
Subsection 269K(1) of the Act provides in part that as soon as practicable after accepting a TCO application as a valid application, the CEO must publish a notice in the Gazette which includes an invitation to any person who considers that there are reasons why the TCO should not be made to lodge a submission with the CEO. The CEO did not receive any submissions in response to this invitation.
Commencement
Subsection 269S(1) relevantly provides that a TCO is to be taken to have come into force on the day on which the application for the TCO was lodged. TCO No. 0907880 is taken to have come into force on 06 March 2009.
The TCO does not affect the rights of a person (other than the Commonwealth) as at the date of registration so as to disadvantage that person or impose liabilities on a person (other than the Commonwealth) in respect of anything done or omitted to be done before the date of registration. The rights of importers will be beneficially affected. Under paragraph 126(1)(r) of the Regulations, importers of such goods will be able to apply for a refund of duty on goods imported since the day on which the TCO is taken to have come into force. The TCO does not impose any liabilities on any person.
Overview
The Customs Act 1901, enacted by the Australian Parliament, establishes a framework for the administration of customs duties, including provisions for Tariff Concession Orders (TCOs). These orders, as outlined in Part XVA of the Act, allow the Chief Executive Officer of Customs to apply a lower rate of customs duty to specified goods, provided certain criteria are met. The problem or gap addressed by this legislation is the need to facilitate the import of goods that do not have substitutable alternatives produced domestically, thereby promoting competition and potentially lowering costs for consumers. The policy objective is to support industries by ensuring they have access to competitively priced goods, which can enhance their ability to compete both domestically and internationally. The Tariff Concession Instrument No. 0907880, made on 29 May 2009, exemplifies the application of this legislative framework, specifically reducing the duty on certain jump starters to zero, following a determination by the CEO that no substitutable goods were produced in Australia at the time of application.
Scope and Application
The Customs Act 1901, under Part XVA, provides the framework for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. This Act applies to individuals and entities seeking tariff concessions on imported goods, provided these goods are not specified in section 269SJ of the Act. For an application to be considered, it must meet the core criteria as outlined in section 269C, which involves confirming that no substitutable goods are produced in Australia in the ordinary course of business on the day the application was lodged. Section 269P(3) mandates that if these criteria are satisfied, a written order must be issued by the CEO, declaring the applicable prescribed item of Schedule 4 to the Customs Tariff Act 1995, which determines the duty rate. This particular legislative instrument, TCO No. 0907880, applies to specific jump starters and sets their duty rate at free, down from the general rate of 5%, effective from 6 March 2009. The TCO ensures that the rights of importers are positively affected and allows for duty refunds on imports of these goods since the date the TCO came into force, without imposing any liabilities on persons other than the Commonwealth.
Key Provisions
The Customs Act 1901, particularly Part XVA, establishes a framework for the creation of Tariff Concession Orders (TCOs) (s 269F). These orders, when granted, apply a lower rate of customs duty to specified goods. The process begins with an application to the Chief Executive Officer of Customs (CEO), who must then assess whether the application meets the core criteria (s 269C). If the CEO determines that no substitutable goods were produced in Australia at the time the application was made, and that the goods are not those specified in section 269SJ, a TCO is issued. For example, Super Cheap Auto successfully applied for a TCO for certain jump starters, leading to Instrument TCO No 0907880 (s 269P(3)). This particular TCO applied a zero duty rate to these jump starters, as no substitutable goods were produced in Australia at the time of application.
The Act imposes certain obligations on both the applicant and the CEO. The applicant must ensure their application is lodged in accordance with the Act, including meeting the core criteria (s 269C). The CEO, on receiving a valid application, must make a decision based on the evidence provided and, if applicable, issue a TCO (s 269P(3)). Furthermore, the CEO is required to publish a notice in the Gazette inviting any interested parties to lodge submissions against the application, although in this case, no submissions were received (s 269K(1)).
Failure to comply with the provisions of the Act can result in various consequences. While the specific offences and penalties are not detailed in the explanatory statement, breaches of customs laws generally attract significant penalties. For instance, knowingly making a false statement or representation can lead to civil penalties, including fines and imprisonment. Additionally, under the Customs Act, there are provisions for financial penalties and criminal charges for non-compliance, which could include fines up to $22,000 for individuals and significantly higher amounts for corporations, as well as imprisonment terms. The Act ensures that such penalties serve as deterrents to non-compliance and help maintain the integrity of the customs duty system.